AE Presentation Feb 2017

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www.adaro.com

DELIVERING ENERGY

TO BUILD THE NATION

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These materials have been prepared by PT Adaro Energy (the “Company”) and have not been independently verified. No

representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or

completeness of the information presented or contained in these materials. The Company or any of its affiliates, advisers or representatives accepts no liability whatsoever for any loss howsoever arising from any information presented or contained in these materials. The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed.

These materials contain statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and

financial condition of the Company. These statements can be recognized by the use of words such as “expects,” “plan,” “will,” “estimates,” “projects,” “intends,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking

statements to reflect future events or circumstances.

These materials are for information purposes only and do not constitute or form part of an offer, solicitation or invitation of any offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract, commitment or investment decision whatsoever. Any decision to purchase or subscribe for any securities of the Company should be made after seeking appropriate professional advice.

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Key questions:

• Will supply rationalization stay?

• Can demand catch up with supply?

• How has Adaro performed?

• How does Adaro respond to recent development in the

coal market?

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Supply response is apparent

• China coal production declined ~10% in 2016, due to:

− Reduction of working days to 276 days

from 330 days.

• China is expected to cut up to 1 Bt of excess capacity by 2020.

• China’s coal supply cut should continue under government reforms.

• Indonesia coal production from CCoW miners

were relatively flat in 2016, mainly due to:

− Uncertainty in the coal market.

− Tighter shipments procedures for coal

export (i.e. submission of ET batubara, proof of royalty payment, etc.).

Coal Production (Mt)

0 500 1,000 1,500 2,000 2,500

Indonesia China

FY15 FY16

-0.2%

Source: Adaro’s research, IHS Energy, WoodMackenzie

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Coal price gaining back momentum

• China’s supply discipline encourages more imports into the country.

$ RM

300 350 400 450 500 550 600 650 700 750

30 40 50 60 70 80 90 100 110 120

Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Global Coal Newcastle QHD 5500 NAR

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• China’s share in seaborne market to decline.

• Increased potential from Southeast Asia, North Asia, and India.

• Electrification in the developing world continues to drive coal demand.

Long term coal demand outlook remains

robust…

Japan, Korea, Taiwan

Seaborne coal demand by country (Mt)

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• Coal remains as the fuel of choice for developing economies in Southeast Asia.

• Affordable and abundant

• 2016-2017: additional ~10GW in coal fired capacity in SEA.

• SEA countries are estimated to import 75 Mt of coal in 2016, a y-o-y increase of 13 Mt.

Source: WoodMackenzie Energy Market Service

Coal capacity additions inSoutheast Asia per annum

…especially from Southeast Asia

56 131

268

132

259 80

2013 2020 2030

Domestic Consumption (Non-Indonesia) Domestic Consumption (Indonesia) Imports

Total

214 Mt

Total

360 Mt

Total

600 Mt

Source: Adaro’s Research

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Quick look on Indonesia

• While Indonesia’s coal production in 2016 was

relatively flat o-y and its export decreased ~2%

y-o-y…

• …domestic coal demand in 2016 increased ~11% y-o-y.

Indonesia’s Coal Sales (Mt)

• Coal accounted for 56% of Indonesia’s electricity

generation in 2015.

• Despite expected increase from gas and

renewables, coal remains as key energy source for power generation in Indonesia.

Indonesia’s Electricity Generation by Source

48% 56%

28%

26%

15% 8%

9% 10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015

Coal Natural Gas Diesel Renewables 0 40 80 120 160 Export Domestic FY15 FY16

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• Along with the improvement of Indonesia’s domestic demand, its share in the seaborne market will fall. • Higher coal price is required to encourage production from Australia.

Where will the supply come from?

Seaborne coal supply by country (Mt)

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Cost reductions are more apparent for countries with costs in local currencies. Thus several coal producers are still able to

increase production.

Seaborne thermal coal cash cost (CV adjusted)

Source: Wood Mackenzie, Dataset: November 2015, “Nominal terms”

As margins tightens, miners continue to cut

cost and capital expenditure…

Capital expenditure of global coal miners

Global capital spending for coal declined 13% in 2015. In 2016, it is expected that capital expenditure will further decline by 9% to US$27 billion due to further projects push

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Indonesia is a major supplier to the global

seaborne thermal coal market, but will there

be enough coal from Indonesia?

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• A survey on Indonesia’s top 15 coal companies shows that Indonesia’s reserves are limited and may not be enough to fulfill demand in the long-term.

With significant power projects in the pipeline,

Indonesia has to prioritize domestic demand

Indonesia Coal Production and Coal Reserves (projected)

Source: Supplying and Financing Coal-Fired Power Plants in the 35 GW Programme – a study by APBI (ICMA) and PwC, 2016

50 100 150 200 250 300 350 400 450 2,000 4,000 6,000 8,000 10,000 12,000

2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

C o a l P ro d u ct io n ( M t) C o a l R e se rv e s (M t)

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Resilient operational and financial

results

OPERATIONAL 2016 2015 % Change

Production (Mt) 52.64 51.46 2%

Sales (Mt) 54.09 53.11 2%

OB removal (Mbcm) 234.13 266.97 -12%

FINANCIAL (US$ millions, unless indicated) 9M 2016 9M 2015 % Change

Net Revenue 1,778 2,112 -16%

Core Earnings 281 228 23%

Operational EBITDA 625 568 10%

Cash 964 785 23%

Net Debt to Equity (x) 0.14 0.26 -

Net Debt to LTM EBITDA (x) 0.65 1.18 -

Free Cash Flow 352 354 -1%

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Solid balance sheet and strong cash generation

Cash and Free Cash Flow (million US$) Net Debt Position and Leverage Ratios

0.0 0.4 0.8 1.2 1.6 2.0

0 500 1,000 1,500 2,000 2,500

2011 2012 2013 2014 2015

Net Debt (million US$) Net Debt to Equity (x) Net Debt to EBITDA (x)

• Focus on deleveraging.

• Healthy balance sheet, strong capital structure and cash preservation.

• Investment grade rating (BBB-) from Japan Credit Rating Agency with a STABLE outlook.

0 100 200 300 400 500 600 700 800

2011 2012 2013 2014 2015

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Cost control

–

key in delivering

strong performance

Mining, 35% - 40%

Fuel, 25% - 30% Freight & handling, 20% Coal processing, 10% Fixed overhead, 5%

Source: Bloomberg, based on trailing 12M EBITDA

Adaro has one of the highest operational EBITDA margin among thermal coal peers

Adaro’s Estimated Coal Cash Cost Breakdown (9M16) Operational EBITDA Margin

0% 5% 10% 15% 20% 25% 30% 35% 40% Sh e n h u a A d ar o P T B A K id e co IT MG

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Delivering return to shareholder

0% 10% 20% 30% 40% 50% 60%

0 30 60 90 120 150 180 210

2011 2012 2013 2014 2015

Dividend (million US$) Payout Ratio

• Adaro has continued to pay dividend through the cyclical downturn.

• Although we have no fix dividend payout ratio, but since our IPO in 2008, our average dividend payout ratio is ~43%.

• In the past three year, we have paid US$75 million of dividend per year.

• We announced interim dividend payment for 2016 of US$60.7 million, to be paid on January 13,

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•

Among the largest single-concession coal producers in the southern hemisphere.

•

Top 5 thermal coal exporter globally.

•

Major supplier to Indonesia’s domestic markets.

•

One of the world’s lowest-cost coal producers.

•

Envirocoal is an environmentally friendly coal.

•

Vertically integrated business model.

•

Strong credit profile.

•

High visibility of future earnings.

•

Reputable and experienced management and controlling shareholders.

Production

2014A: 56.2 Mt

2015A: 51.5 Mt

2016A: 52.6 Mt

Envirocoal

Sub-bituminous, medium calorific value, ultra-low pollutants

Trademark registered in many jurisdictions

Customers

More than 50 customers in 12 countries

Blue-chip power generation utilities

Pricing

Based on fixed negotiation and index-linked

Adjustment for heat content

JORC reserves / resources

Reserves: 1.1 Btas of YE2015

Resources: 12.8 Bt (includes option to control 7.9 Bt) as of YE2015

Location South, East and Central Kalimantan, South Sumatra

Credit Rating BBB- (JCR)

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Adaro Indonesia (AI)

Coal mining, S Kalimantan

Balangan Coal

Coal mining, S Kalimantan

Mustika Indah Permai (MIP)

Coal mining, S Sumatra

Bukit Enim Energi (BEE)

Coal mining, S Sumatra

Adaro MetCoal (AMC)),

Coal mining, C Kalimantan E Kalimantan

Bhakti Energi Persada (BEP)

Coal mining, E Kalimantan

88.8% 75% 75% 61% 100% 10.2%

Makmur Sejahtera Wisesa (MSW)

Operator of 2x30MW mine-mouth power plant in S. Kalimantan

Bhimasena Power (BPI)

Partner in 2x1000MW power generation project in Central Java

Tanjung Power Indonesia (TPI)

Partner in 2x100MW power plant project in

S. Kalimantan

100%

34%

65%

Coal Mining Assets Mining Services and Logistics Power

Saptaindra Sejati (SIS)

Coal mining and hauling contractor

Jasapower Indonesia (JPI)

Operator of overburden crusher and conveyor

Adaro Eksplorasi Indonesia (AEI)

Mining exploration

Adaro Mining Technologies (AMT)

Coal research & development

100% 100% 100% 100% 100% 51.2% 100% 100% Maritim Barito Perkasa (MBP)

Barging & shiploading

Sarana Daya Mandiri (SDM)

Dredging & maintenance in Barito River mouth

Indonesia Multi Purpose Terminal (IMPT)

Port management & terminal operator

Indonesia Bulk Terminal (IBT)

Coal terminal & fuel storage

Business model that creates

sustainable value

Adaro Energy (AE)

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Diversified Coal Assets Across Indonesia

Indonesian Coal

Resources : 124.8 Bt Reserves : 28.0 Bt

Adaro has more than 12 billion tonnes (Bt) of coal resources (including option to acquire 7.9 Bt) and 1.2 Bt of coal reserves.

Adaro Indonesia: Existing, S Kalimantan sub-bituminous Resources 4.9Bt Reserves 900Mt

MIP: 75% stake S Sumatra sub-bituminous Resources 288Mt Reserves 254 Mt

BEE: 61.04% stake S Sumatra sub-bituminous Geological study phase IMC: 100% C Kalimantan Metallurgical coal Resources 1.27Bt

3 4

5 6

1 3 4 6

BEP: 10.22% stake with option to acquire 90% E Kalimantan sub-bituminous Resources 7.9Bt 5 Balangan: S Kalimantan sub-bituminous Resources 335Mt Reserves 186Mt 2 2 1

Note: Reserves and Resources numbers above are before taking

into account AE’s equity ownership

Note on IMC: we have signed the share sale agreement with BHP

Billiton to acquire BHP’s portion in the project (75%). This

transaction will be effective once all the requirements are met.

Deepening Coal Product Portfolio and Set to Capitalize Assets to Support Indonesia’s Development

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Over Two Decades of Solid Production

Performance

Units 2017 2016 2015

Guidance Actual Actual

Production volume Mt 52 - 54 52.5 51.5

Strip ratio bcm/tonne 4.85 4.45 5.19

• Produce low to medium heat value coal with low pollutant content, ideal for power generation. 0 50 100 150 200 250 300 350 0 10 20 30 40 50 60

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

O v e rb u rd e n r e m o v a l (M b cm ) P ro d u ct io n ( M t)

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Strong Customer Base with Focus on

Domestic Market

Most customers are sovereign backed power companies, and with over 50% have had a relationship of more than 10 years

 Average length of coal supply agreement is 3 to 5 years.

 Many of our contracts are reset annually, with a combination of negotiated, fixed and index-linked pricing.

Strong relationship with many blue-chip investment-grade clients mitigates risk Customer type by % volume (FY16) Geographical breakdown of customers (FY16)

* Others include Philippines, Taiwan, Cambodia, Thailand, Vietnam and the USA. Indonesia,

25%

India, 14%

China, 14% South

Korea, 9% Japan, 9%

Malaysia, 9% Hong Kong, 7%

Spain, 5%

Others, 8%

* Others include cement, pulp & paper, and industrial 95%

Power

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Barging to Indonesia Bulk Terminal Indonesia Bulk Terminal, Pulau Laut Shiploading at Taboneo offshore anchorage

Barging to domestic customers

Most of Adaro's coal come from the deposits in South Kalimantan mined by AI. The physical mining and transporting of coal to

customers is done by contractors appointed by AI. We tightly control this coal supply chain by using a subsidiary company at each stage as one of the dominant contractors.

Shiploading and sea barging by MBP Coal terminal and fuel storage by IBT

Our Reliable Coal

Supply Chain

AI mining area, with coal extracted from the Tutupan, Wara & Paringin pits

AI performs mining activities supported by its contractors (SIS, PAMA and BUMA).

Coal is trucked along haul road owned by AI to a port on the Barito River.

AI crushes the coal, stores it when necessary and loads it to barges at Kelanis river terminal

Coal is barged to the sea by our subsidiary MBP and third-party contractors.

At the river mouth, our subsidiary, SDM,dredges and maintains a shipping channel

6 7 8

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Adaro’s Metallurgical Coal Asset

• Adaro Energy completed the acquisition of

IMC from BHP Billiton for 7 CCOW’s in

Central and East Kalimantan.

• The transaction value was $120 million for

75% of the properties. Adaro now owns 100% of the asset.

• First coal production has started at the Haju

mine which has a production capacity of 1 million tonnes a year. Coal is mined and

hauled to a barge loading site at Muara Tuhup on the Barito river.

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Adaro Mining Services and

Logistics

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Ensuring operational excellence

• Key part of our vertical integration.

• Ensures operational excellence, productivity improvement and timely reliable delivery to customers.

• Non coal mining business contributed 42% of Adaro Energy EBITDA in 2015. This contribution is expected to grow going forward.

• Actively pursue third-party revenue growth from these businesses.

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Name Information

PT Saptaindra Sejati (SIS) • One of Indonesia’s leading mining contractors.

• Owns more than 1,500 heavy equipment.

• FY15 overburden removal volume: 151.5 Mbcm.

• FY15 coal production volume: 29.5 Mt. PT Maritim Barito Perkasa (MBP) • Barging and ship-loading contractor.

• 95 sets of tugs and barges with capacity of 514,200 dwt.

• Offshore coal loading at Taboneo with capacity up to 165,000 tonnes per day via floating cranes (15,000-20,000tpd), FTU (60,000tpd) and self-loading geared vessels.

• FY15 coal transport volume: 31.1 Mt.

• FY15 coal loading volume: 35.8 Mt.

PT Sarana Daya Mandiri (SDM) • SDM dredged the Barito river channel in 2008, increasing capacity to 200Mt per year. It now manages and maintains the channel.

• Adaro owns 51.2% of SDM, with the local port authority and local government owning the remaining interest.

PT Indonesia Bulk Terminal (IBT) • Onshore coal port and fuel facilities in Pulau Laut, South Kalimantan.

• Signed strategic partnership with PT Pertamina (Persero) in infrastructure, transportation and fuel supply.

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MSW’s 2x30 MW mine-mouth power plant in Tanjung,

South Kalimantan

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Building our future through Adaro Power

• Huge potential to tap into as in the next 10 years PLN plans to add 80.5 GW of electricity generation in Indonesia.

• Indonesia’s electrification ratio of 87.5% (2015) lags behind other SEA countries.

• Commercially and financially attractive with solid IRR and low-cost long-term project financing.

• Creates a new captive market and helps meet our domestic market obligation.

• Helps to lessen volatility in Adaro’s business model.

• Contributes to the development of Indonesia’s energy needs.

• Extending beyond coal to gas and renewables to replicate Indonesia’s energy mix.

• Currently operating a 2x30 MW mine-mouth power plant in South Kalimantan.

Indonesia's Additional Electricity Generation Capacity (MW)

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total

Coal-fired 3,027 1,024 3,397 17,175 4,548 1,781 400 700 500 2,250 34,802

Others 1,113 3,463 9,041 4,223 1,325 1,184 2,416 3,698 7,918 11,357 45,738

Total 4,140 4,487 12,438 21,398 5,873 2,965 2,816 4,398 8,418 13,607 80,540

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Adaro’s First IPP: Central Java

Power Project

Bhimasena Power Indonesia

Capacity 2x1000 MW

Stake Acquired 34%

Partner(s) J-Power (34%), Itochu (32%)

Location Central Java

Development Progress

• Signed 25 years PPA with PLN

• Total Capex: US$4.2 billion

• Concluded financial closure on June 6th_{, 2016.} • Expected COD: 2020

• Expected coal requirement: 7 Mtpa

Financing Non-recourse project debt financing. Combination of ECA and commercial

loan

Expected Debt vs. Equity 80:20

Reached financial close and has started construction

• Indonesia’s first largest IPP to use Ultra Super-Critical (USC) boiler technology, which is environmentally friendly, highly efficient and able to burn low CV coal.

• Adaro to become main coal supplier to this project.

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Pipeline of power project

Tanjung Power Indonesia

Capacity 2x100 MW

Stake Acquired 65%

Partner(s) Korea EWP (35%)

Location South Kalimantan

Development Progress

• Signed PPA with PLN

• Expected coal requirement: 1 Mtpa

• Achieved financial close in Jan 2016

• Construction is on-going and COD expected in 2019

Financing Non-recourse project debt financing. Combination of ECA and commercial

loan

Expected Debt vs. Equity 75:25

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Adaro Energy guidance for 2017

47.2

52.3

56.2

51.5 52.5 52 - 54

2012A 2013A 2014A 2015A 2016A 2017F

5.6 5.7 _5.2

4.5 4.85

2012A 2013A 2014A 2015A 2016A 2017F

Consolidated Planned Strip Ratio (bcm/t)

Coal Production (Mt)

Operational EBITDA (US$ billions)

1.1

0.8 0.9

0.7 _{0.45 - 0.7}

0.9 – 1.1

2012A 2013A 2014A 2015A 2016F 2017

Capital Expenditure (US$ million)

490

185 ₁₆₅

98 75 - 100

200 - 250

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Conclusions and takeaways

• Coal market is moving in positive direction towards supply and demand balance.

• China’s supply rationalization has provided the much

-needed support for coal

market.

• Indonesia to lessen coal export and focus on the domestic market.

• Long term fundamental for coal remains promising.

• Indonesia and Southeast Asia will be the main drivers.

• Our resilient business model is geared up to take the opportunity.

• Multiple opportunities across the value chain.

• Each engine of growth is expected to grow along with the growth of coal fired

power generations in Indonesia and Southeast Asia.

• Adaro’s financials is in a better, stronger position than five years ago.

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THANK YOU